{"id":4113,"date":"2021-08-09T16:21:51","date_gmt":"2021-08-09T15:21:51","guid":{"rendered":"https:\/\/marriott-stats.com\/nigels-blog\/?p=4113"},"modified":"2022-12-31T12:41:49","modified_gmt":"2022-12-31T12:41:49","slug":"swap-numbers-tell-you-how-many-years-it-will-take-you-to-close-your-pay-gap","status":"publish","type":"post","link":"https:\/\/marriott-stats.com\/nigels-blog\/swap-numbers-tell-you-how-many-years-it-will-take-you-to-close-your-pay-gap\/","title":{"rendered":"Pay Gaps #23A – How long will it take to close your pay gap?"},"content":{"rendered":"

Five months ago, I introduced the gender swap number as a superior statistic to the median gender pay gap<\/a>.\u00a0 Feedback from clients and others since then has confirmed my hope they would find it more intuitive to use and interpret.\u00a0 This encouraged me to call on Parliament to amend the UK gender pay gap legislation so that swap numbers could be published<\/a> for employers with 250 or more employees.\u00a0 I now want to build on this by showing a couple of simple calculations that can turn a swap number into an estimate of how long it will take an employer to close its pay gap.<\/p>\n

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What do these 8 employers have in common?<\/span><\/strong><\/h5>\n

All have published their 2020 gender pay gap data (which you can find here)<\/a> and all stated they had between 250 & 499 employees.\u00a0 For the purposes of this article, I am going to assume each employer here has 400 employees.<\/p>\n

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The answer is that they all have a Gender Swap Number per 1,000 Employees (GSN1K)<\/strong> <\/span>of 40, -40 in the case of Nestle Waters and +40 for the other 7 employers.\u00a0 \u00a0Even though the median woman earn very different amounts per hour at these employers, the amount of work needed to close their pay gaps to zero is the same on average.\u00a0 I will demonstrate shortly a simple formula that you can use to estimate that on average, it will take each employer 27 years to reduce their GSN1K to below 2.5 assuming their average annual turnover of employees is 10%.<\/p>\n

Why does the median gender pay gap vary so much across these 8 employers even if they have the same GSN1K?\u00a0 The short answer is that they have different pay scales and the long answer can be found under recommendation 5 of my 7+5 recommendations for improving pay gap reporting<\/a>.<\/p>\n

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How to calculate a Swap Number for any employer<\/strong><\/span><\/h5>\n

You can skip this section if you already know how to calculate swap numbers.<\/p>\n

I explain the full calculation in this article<\/a> and demonstrate it using Ryanair as an example<\/a> but here is a reminder of how to calculate the swap number for any pair of employee categories.\u00a0 I will use men & women as the two categories here but the swap number calculation can be used for any two categories of employees e.g. you could replace men & women below with able-bodied & disabled.<\/p>\n

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  1. Count the number of men and women in each of the 4 pay quarters<\/span>.<\/strong><\/span>\n